On 4 October 2018, the Grand Chamber of the Court of Justice of the European Union (CJEU) handed down its judgment in Case C-12/17 Tribunalul Botoşani, Ministerul Justiţiei v Maria Dicu. The case has received little attention so far even though it marks a significant step backwards in the CJEU’s interpretation of the right to paid annual leave.
The case concerns the interplay of two Directives. On the one hand, Article 7 of Directive 2003/88/EC (the Working Time Directive), which entitles workers to paid annual leave of at least four weeks. On the other hand, Directive 2010/18/EU (the Parental Leave Directive) which sets minimum requirements for parental leave for male and female workers, and for related employment protection. The Parental Leave Directive is silent on whether parents continue to accrue annual leave while on a period of parental leave.
The facts in Maria Dicu
Ms Dicu is a judge at the Regional Court of Botoșani in Romania. Under Romanian law, she is entitled to up to 35 days annual leave per calendar year. The allocation of annual leave is based on the number of days of ‘active work’. ‘Active work’ for these purposes includes periods of maternity leave and leave taken to care for a sick child. Parental leave is not included although special provision may be made in law, in an applicable collective agreement or in the individual employment contract. No such provision has been made in this case.
In 2014, Ms Dicu first took her entire annual leave entitlement and was then on maternity leave from 1 October 2014 to 3 February 2015. Subsequently, she took parental leave from 4 February 2015 until 16 September 2015. Lastly, she took 30 days’ paid annual leave from 17 September to 17 October 2015. Following her return to work, Ms Dicu asked her employer to grant her the five remaining days of paid annual leave for 2015, which she intended to take on working days over the end-of-year holiday period. Her employer, the Regional Court, refused that request on the ground that she had not worked a sufficient amount to be able to take 35 days annual leave in 2015. The period of parental leave that she took in 2015 could not be regarded as a period of active work for the purpose of determining her paid annual leave entitlement. Her employer also indicated that the paid annual leave taken by Ms Dicu between 17 September and 17 October 2015 included 7 days’ leave taken in advance in respect of 2016.
Ms Dicu successfully brought proceedings against her employer, the Court of Appeal, the Ministry of Justice and the Governing Council of the Judiciary before the Regional Court in Cluj seeking a declaration that, for the purpose of determining her paid annual leave entitlement for 2015, the period she took as parental leave is to be regarded as a period of active work. On appeal, the Court of Appeal, Cluj referred a question to the CJEU asking whether the national law which held that parental leave did not count as work for the purpose of determining an annual leave entitlement was compatible with article 7 of the Working Time Directive.
In its short judgment, the CJEU first reiterates the fundamental nature of the right to paid annual leave contained in article 7 of the Working Time Directive and article 31 of the Charter of Fundamental Rights and recalls its purpose; namely, to enable the worker both to rest from carrying out her work and to enjoy a period of relaxation and leisure. According to the CJEU (para 28), this purpose presupposes that the worker actually worked. The CJEU recalls its previous case law which held that in specific circumstances, such as duly certified sick leave or maternity leave, workers are unable to perform their duties but should nonetheless be entitled to paid annual leave.
However, the CJEU finds that this case law cannot be applied to the present scenario where a worker took parental leave for three reasons. First, periods of sick leave are generally unforeseen whereas parental leave ‘is not unforeseeable and, in most cases, is a reflection of the worker’s wish to take care of his or her child’ (para 32). Second, the CJEU distinguishes between a worker on parental leave and a worker on sick leave. In contrast to sick leave, a worker on parental leave is not ‘subject to physical or psychological constraints caused by an illness’ (para 33). Third, parental leave is also different (with no further justification provided) to maternity leave which is intended to protect ‘a woman’s biological condition during and after pregnancy’ and ‘to protect the special relationship between a woman and her child’ following birth (para 34). Finally, although the CJEU recognises that parental leave does not negate a worker’s status, it can lead to the suspension of employment rights, including annual leave accrual, during that period. Member States are therefore permitted to hold that a period of parental leave does not count as a period of actual work for the purpose of determining a worker’s paid annual leave entitlement under the Working Time Directive.
The approach of the CJEU in Dicu is unsatisfactory if one considers the case in light of previous case law on article 7 of the Working Time Directive and the aims underpinning the Parental Leave Directive.
Article 7 of the Working Time Directive has hitherto been interpreted progressively by the CJEU in a plethora of case law. The right to paid annual leave is ‘a particularly important principle of Community social law from which there can be no derogations’ (Case C-350/06 Schultz-Hoff, para 43). It is a social right conferred directly on a worker (Case C-173/99 BECTU) which‘cannot be interpreted restrictively’ (Case C-486/06 Zentralbetriebsrat der Landeskrankenhäuser Tirols, para 29).
The CJEU’s approach in Dicu negates this fundamental character of the right to paid annual leave. The CJEU recognises that parental leave does not alter Ms Dicu’s status as a worker (para 35). If the right to paid annual leave is, as the CJEU has previously suggested, a social right which is conferred directly and automatically on an individual by virtue of their status as a worker then it should be granted to Ms Dicu as long as she retains that status. In Case C-282/10 Dominguez, the CJEU confirmed that there was no requirement for actual work before a worker was entitled to annual leave (para 20). As the take-up of parental leave does not negate Ms Dicu’s status as a worker and there is no requirement for actual work before a worker is entitled to annual leave, parental leave should have no effect on the right to annual leave. Yet by requiring actual work, the CJEU has, in effect, overturned its previous case law which proscribed preconditions or prerequisites being placed on the acquisition of the right to paid annual leave and has adopted a restrictive approach to the interpretation of the right.
The CJEU also did not examine the concept of ‘active work’ in Romanian law. Under article 50 of the Romanian Labour Code, an employment contract is suspended de jurein cases of maternity leave. Under article 51 of the Labour Code, an employment contract is suspended on the initiative of the employee in cases where a worker takes parental leave or leave to take care of a sick child. Annual leave continues to accrue where employees take maternity leave or leave to look after a sick child (CJEU judgment, paras 15-16) as these are considered periods of ‘active work’; parental leave is treated differently. Thus, if Ms Dicu had taken leave to take care of a sick child then, under Romanian law, she would have been engaged in ‘active work’ and would have therefore accrued annual leave.In Case C-519/03 Commission v Luxembourg, the CJEU explained that ‘parental leave is granted to parents to enable them to take care of their child’ (para 32). The purpose of parental leave is therefore to spend time at home looking after a child who could be sick or healthy. The distinction between leave to look after a sick child – which counts as ‘active work’ – and parental leave to care for a sick or healthy child – which is not ‘active work’ – thus seems arbitrary.
No justification is provided by the CJEU as to why parental leave should be considered different from maternity leave in relation to annual leave. In Case C-342/01 Merino Gómez, the CJEU ruled that a worker on maternity leave cannot lose her entitlement to paid annual leave. Both periods of leave are distinct; they serve different purposes; and cannot be taken contemporaneously. In his Opinion in Dicu, Advocate General Mengozzi suggests that a worker on parental leave is comparable to a worker whose working time has been temporarily reduced as a result of a social plan to support an employer in financial difficulties. As the CJEU previously held that annual leave entitlement could be calculated pro rata in this scenario (Case C-229/11 Heimann), the Advocate General in Dicu accepted that a period of parental leave could also be excluded from calculating annual leave. However, this analogy exemplifies a misunderstanding of the purpose and nature of parental leave. Its purpose is to give parents time to look after a child without any other distractions. Staying at home during a period of parental leave can be exhausting, time-consuming and physically demanding. The length of time taken for parental leave is not always foreseeable especially if the leave is used to look after an ill child or a child with disabilities. As such, parental leave is not a period of rest; but a distinct period of leave different from annual leave. A worker who takes parental leave has as much a need for paid annual leave – a period of rest and an opportunity for relaxation for general health and safety purposes – following parental leave as a worker who has taken maternity leave or leave to look after a sick child.
Finally, the CJEU’s approach in Dicu undermines the aims and objectives of the Parental Leave Directive. The Directive is a measure designed to foster equal opportunities between men and women, the participation of women in the labour market and to strengthen the role of men as carers in the family. Parental leave does not have to be remunerated (and in the UK it is not) but there is a general consensus that the uptake of parental leave increases when it is paid (and if benefits associated with worker status are maintained). Giving workers the right to accumulate paid annual leave during a period of parental leave is another type of incentive which could encourage workers to make use of the right.
Clause 5(2) of the Directive provides that ‘rights acquired or in the process of being acquired by the worker on the date on which parental leave starts shall be maintained as they stand until the end of parental leave’. The CJEU has previously interpreted this provision in favour of the worker so that parental leave should not lead to a reduction or loss in rights, including the right to take paid annual leave upon return from parental leave regardless of the length of time that a worker has been off (see Zentralbetriebsrat der Landeskrankenhäuser Tirols, Case 537/07, Gómez-Limón Sánchez-Camacho and Meerts Case C-116/08). Recognising the right to accumulate paid annual leave during a period of parental leave would have been a natural progression of this line of case law.
Instead, denying workers paid annual leave during a period of parental leave disincentives the take-up of the right, particularly amongst single parents, low-paid workers or fathers. As a result, the decision in this case will do little to promote equal opportunities and to encourage the participation of women in the labour market. It may lead countries, such as the UK where annual leave is accrued during parental leave, to amend their laws in order to weaken the rights afforded to workers under the Working Time Directive. The European Commission, as part of its ‘New Start Initiative’ under the European Pillar for Social Rights, has published a proposal for a Directive on Work-Life Balance for Parents and Carers, which will strengthen parental leave provision by introducing a right to compensation at least at sick pay level during a period of parental leave. It is to be hoped that the Commission may take the opportunity to clarify that workers should accrue paid annual leave during parental leave.
About the author: Rebecca Zahn (@Zahn_RL) is Senior Lecturer at the University of Strathclyde. She researches in the field of labour law (national, European and comparative), with a particular focus on collective labour law. She is the author of New Labour Laws in Old Member States (CUP, 2017).
(Suggested citation: R Zahn, ‘Do parents need a holiday? The Court of Justice rules on parental leave and holiday rights,’ UK Labour Law Blog, 7 November 2018, available at https://wordpress.com/view/uklabourlawblog.com).